tv Nightly Business Report PBS September 21, 2012 4:30pm-5:00pm PDT
captioning sponsored by wpbt >> this is n.b.r. >> susie: i'm susie gharib. good evening, everyone. the iphone 5 is out and crowds of people around the world stood in line to buy it. but will trouble with its mapping feature spoil profits for apple? >> tom: i'm tom hudson. mitt romney releases his 2011 tax return. he paid an effective tax rate of just over 14%. >> susie: and the tax return highlights the debate over americans who contribute to the economy and people who take government handouts. we look at the campaign debate of the makers versus the moochers.
>> tom: that and more tonight on "n.b.r." >> tom: a new phone and a new record high stock price during the day for apple. die hard fans lined up at apple stores worldwide to be among the first to get their hands on the new iphone 5. by one estimate, lines were almost twice as long compared to the wait for the last version. but un-characteristic for an apple product launch. there are growing complaints about one of the device's biggest changes. its maps. erika miller reports from new york. >> reporter: in a predictable ritual, apple fans camped out overnight to get their hands on the new iphone 5. many are loyal apple fans, eager to upgrade: what features are you most excited about? >> the screen-- the larger screen, the camera, i'm interested to see what that looks like once i start to take pictures and things like that. >> reporter: some came at the behest of their kids. >> i balked at first because their phones are perfectly good. and they work perfectly well.
and it was only because my son is turning 12 that he gets a phone that year. so we decided to upgrade the whole family. >> reporter: unfortunately, she could only get two of the four phones she wanted. >> the 32 megabytes in black and white are sold out. they're gone! >> reporter: but for all the hype, apple was still advertising the older 4-s version its store today. the company is also facing backlash against its new map app. the software replaces google maps and websites have already sprung up mocking apple's innacuracies. but that controversy didn't seem to hinder sales today. >> i'm pretty sure an update will clear everything up anyway. it's that simple. >> reporter: by midday, lines at many apple stores were already much shorter. but don't be fooled. this is expected to be the largest consumer electronics debut in history. by some estimates, apple could
sell as many as 10 million iphones by monday morning. that would be twice what was sold the opening weekend for the last iphone model, the 4-s. for apple, a lot is riding on this launch. the iphone is its best-selling prodt. >> the iphone 5 drives approximately 70% of the profitability for apple. so this probably their most critical product launch out of all their product lines. and, to the extent that apple only comes out with a new iphone on an annual basis, clearly, this makes or breaks the year. >> reporter: apple shares didn't get much of a pop today, but some of its part suppliers sure did. alvago technologies and skyworks solutions make semiconductors for the device. their shares were up 5% and 3% respectively. several industry analysts predict apple will sell about 50 million iphone 5's in the fourth quarter. but there is one big cavt: whether apple can make enough of the devices to meet demand. erika miller, "n.b.r.," new york. >> susie: those kinds of predictions are juicing up consumer interest in the phone and investor interest in apple's stock. some people call the hoopla hype. others say it's masterful public promotion, but there's no
argument over how influential apple is in any stock index in which its included. there are 500 companies in the s&p 500 index, but only one, apple, is responsible for almost 5% of the entire index. that's the kind of domination apple has as the most valuable publicly traded company in the u.s. how does that influence the index? with apple, the s&p 500 has rallied 16.1% this year. if you take out apple, the gain drops to 14.1%. meanwhile, research in motion's blackberry service was down in europe for three hours today leading the company's c.e.o. to apologize to customers. there was no reason given for the outage. that embarrassment comes just ahead of two events next week. on tuesday, research in motion holds a conference hoping to get developers interested in creating apps for its new blackberry 10 device. that smart-phone is expected to be on the market next year. and then on thursday. rim reports its latest quarterly
results. investors are eager to see how business is managing against apple's iphone and devices running google's android software. the stock will also be in the spotlight. it's now hovering just above new lows. >> tom: still ahead,working smarter, not harder. we talk with harvard business school professor bob pozen about extreme productivity. >> tom: while the apple launch pushed technology stocks higher, gains were held in check for the broad market as investors kept a close eye on talks between spain and the european commission. they're working together to build an economic reform plan that could pave the way for a potential bailout, shoring up a financial rescue for the region. european markets finished mostly higher on reports of those talks. on wall street, the dow closed down 17 points, the nasdaq rose four, the s&p was flat. for the week, the major averag were slightly lower. the dow and nasdaq fell 0.1%. the s&p 500 fell 0.4%
>> tom: mitt romney released his 2011 tax returns today. the republican presidential candidate and his wife ann paid nearly $2 million in taxes last year on more than $13.5 million in income, mostly from investments. in all, the romney's paid an effective tax rate of about 14%. they gave about $4 million to charities, about 30% of their income. romney has faced mounting pressure from president obama and democrats to release more
financial and tax information. this time, he and his wife ann released last year's returns and a summary of their tax history over the past 20 years. >> reporter: mitt romney's been pretty busy on the campaign trail, maybe that's why he got an extension on his taxes returns,which he filed today. >> i will not apologize for mitt and ann romney's 14% tax rate from last year could have been lower. they only claimed about half of their charitable donations, but the romneys earn most of their money from investments, so they paid a lower rate than other wealthy americans. according to the tax policy center, the richest tax payers- those with incomes over $2.4 million paid an average effective tax rate of 21.5% last year. the release comes after months of political pressure for romney to open up about his finances and closes a collossally bad week for the campaign. monday, liberal magazine "mother jones" posted this video of the candidate telling donors nearly half of americans don't pay taxes.
>> reporter: the comments seem to have divided national politics, fueling the debate on whether the u.s. should be a country of makers or a country of takers. today, the president slammed romney for only representing half the country. >> i don't believe we can get very far with leaders who write off half the nation as a bunch of victims, who think that they're not interested in taking responsibility for their own lives. >> reporter: as the battle rages on, it could be a deciding factor in who wins in november. it's up to voters to decide whether america will be a nation of makers or one of takers. sylvia hall, "n.b.r.," washington. >> susie: for more analysis and opposing views on the debate "makers versus "moochers," we're happy to have with us jared bernstein, senior fellow at the
center on budget and policy priorities and nick eberstadt, political economist at the american enterprise institute and author of the upcoming book, "a nation of takers: america's entitlement epidemic." gentlemen, welcome, and nick, let me begin with you. you say that the u.s. government has become an entitlement machine with millions of americans freeloading off everyone else. tell us what you mean? >> i think i said it was an entitlement machine, i don't think i ever used the word freeloading. the facts of the matter are that 50 years ago, the federal government devoted one dollar to entitlements to every $2 it devoted to everything else. it's turned upside dow now two out of every three dollars the government allocates for entitlements. >> what are you're thoughts >> you said you reject the notion of the term moochers,
and the debate is misguided. what are your thoughts on this? >> i feel pretty strongly that it's misguided debate and divisive one, and a false framework, because the dynamics of the rise of americans can't possibly be divided into makers or takers or moochers. if y tink about social security and medicare, the largest part of the entitlement that nick is talking about, the beneficiaries of those programs paid into those programs during their working life. so clearly they were makers at that poibts, and then upon retirement they draw on those benefits. i think those are exemplary social insurance programs. >> susie: what do you say to that, nick? at times we're makers and other times takers. >> if the social insurance programs of america -- if medicare, soci security and the others were soundly funded
actuaryly, i would have no debate. but they're woefully underfunded. they're trillions of dollars underfunded in terms of promises and trajectory. somebody has got to pay for that. the answer to that somebody is going to be the currently unborn, and that transfer is a taker transfer by people who aren't part of the system that works. >> i actually think that's an interesting point. in a sense, at least when i listen to what nick is saying, i don't hear the description of takers and moochers and makers. i really don't. i hear a system of a couple of programs, we're talk being social security and medicare that have accounting short falls, and those can be addressed through public policys in ways they think are not only essential to ensure that those programs have the durability they should, but are very much within the realm of policy management. we can do this. it's actually not all that hard. >> it may not be all that
hard. i see the arithmetic he's talking about, but the problem is, if we want to make these programs work, you have basically two answers. you can raise taxes a whole lot, or can you cut when people are expecting a whole lot. and so gee whiz, why haven't we had this discussion for the last 30 years. >> again, that's a reasonable point. and i think the solution is going to involve more tax revenue and cuts on the benefit side. that's different than the divisive framework -- i'm not saying nick brought us there. but we're into this debate that doesn't represent reality when, as you said, at some point, you're a maker, other points you're a taker. that applies to everyone. >> quickly, let me jump in. we have less than a half minute. >> one other thing. this is important. over the last 30 years, the percentage of people getting means tested benefits has gone from 17% to 30% of u.s. households. you can't say because it's people are twice as poor as 30
years ago ago. there's a march towards greater sbiemgtsments on a means basis. that's problem adic. ism i k that has in part to do with the demographics of the nation. for example, we're an older nation with a much greater share of people in their years when they draw more from those programs. the demographics -- the demographics. >> susie: i'm sorry, we have to en -- i have to jump in. this is an interesting conversation. wish we could continue it. perhaps during the election period. thank you for the lively debate. jir bernstein, and nick erstadt. thank you.
>> we haven't have quite as vely of a debate. a slow burn for the stock indices, and interest dropped as the segwore on friday. after starting with a seven point pop in the first minutes of trading, the s&p 500 slowly lost momentum to end lower by a fraction. volume was heavy thanks to the expiration of options and futures. 1.8 billion shares on the big board. just under 2.6 billion on the nasdaq. the major stock sectors made small moves. the biggest gains came in the telecommunications sector and healthcare. each were up a 0.5%. the materials saw the biggest drop, down 0.4% one of the strongest telecom stocks was sprint. it is one of those selling the new iphone. sprint said supplies at its stores were quote, "serious
constrained or sold out," end quote. shares of sprint climbed 3.9%, ending just a penny below a new 52 week high. like other carriers, sprint subsidizes the phone for customers signing two year contracts, but sprint also offers new customers unlimited data plans, something analyst say may give it a strategic advantage. it has been a big week for homebuilders. first with new construction numbers out earlier this week and today with quarterly results from k.b. home. the builder reported a surprise profit thanks to an increase in home sales and an increase in home prices. average selling prices jumped 8%. k.b. home also reported a spike in orders waiting to be delivered an indication of future revenue. all that helped shares pop 16.4%, rising to more than a two year high. the results are just the latest sign of recovery among home builders. meritage homes rallied 4.9%. lennar added 2.5%. pulte group was up 1.6%.
all three closed at 52 week highs. it wasn't just stay at home stocks, darden restaurants has seen business improve. this is the company behind the olive garden and red lobster brands. but while same store sales at those restaurants were flat to down, business at its smaller chains increased. earnings were two cents better than estimates. it admits it has felt the shaky economy so it will update its olive garden and red lobster restaurants. one changes its already made: charging a dollar more for olive garden's popular never-ending pasta bowl. shares heated up, rising 4.6% to a new all time high. the company also is planning new menus such as lighter dishes and olive garden and more non- seafood fare at red lobster. a mixed finished for the five most actively traded exchange traded products. the emerging markets and russell 2,000 funds were the gainers. and that's tonight's market focus.
>> it's not just the federal reserve, but federal banks across the globe acting to kickstart economies. it helped to fuel the stock rally, which our guest expects to continue. chris orndorff is back. always great to see you. we had you here in the spring. your expectation was s&p at 14 60. we're right about that today. are the gains sustainable. do we climb from here? >> i think so. we'll be flat for a while.
but clearly the fetted and other central banks around the world are really encouraging investors, and doing that with purchases, and what's known as quantitative easing. >> what's putting the stock market to work? >> i like areas that are good values. areas paying dif depds and have high income. that's been a theme for the last year. >> that can be hard to find. we've seen such a nice rally over the past couple of months, let alone the last year sxrkts rush to dividend yields. >> that's right. there's still a few gems we'll talk about later in the program. >> there's a closed end fund, western management, dmo, the ticker symbol. >> paying out a big dividend,
but what are the expectations on the capital side. >> don't fight the fed. we're likely to rise in value. it's a seven percent yield, and a chance >> are these good mortgages that can be paid back? >> i think so. a lot of them are agency mortgages. >> tom: and you help manage this fund. >> that's correct. >> tom: and you're going over to singapore. this isab exchange trading fund. singapore is the crossroads of the world for trade and investment. and the market is highly sensitive. if you think the fed is
helping dproegt, singapore is the place to be. >> would you rather be in singapore than the united states? >> i would. i think they perform better than the u.s. >> tom: you are investing in u.s.ag culture. they make ammonia nitrogen. >> this is a seven percent yield. >> food prices are rising and hence the demand for fertilizer rising, and ammonium nitrate and the ammonia are the ingredients. >> and -- >> it's really all things coming together >> chris, last time we had you are, march 16th. 2012. >> tom: apple launched the iphone today. you liked three stocks back
then, including kbe, a bank exchange traded fund. it's down two percent. and emerging markets and corporate fund fund up five percent, and a real estate investment fund up almost 18%. you style like these? >> i like them all, and certainly the emerging bond fund, pays five percent, and the reits, pay seven%. great opportunities. >> you own these? >> i always eat my own cooking. >> serving it up, chris orndorff with western assets. >> susie: and looking ahead. from the n.y.s.e. to the c.m.e., it's politics in the pits. what are the critical issues for traders when it comes to the presidential election. and we'll talk to the ceo of joy global and get the business outlook for this mining equipment maker. >> tom: we are all guilty of wasting time. but in a slow economy with few job openings, most can't afford to waste time. bob pozen knows. he's taught at harvard, run a global financial firm while serving on a presidential social
security commission. his new book is entitled "extreme productivity." washington bureau chief darren gersh spoke with him. >> tom: when i saw the title of your book, extreme productivity, i'm tweeting and facebooking and writing, and doing everything i can. the extreme productivity sounds like i have to be superman to be extremely productive. do you have to be supermab to do this? >> no, the book is very practical. it contains take aways. it's doable for the normal person, and a guide how to become more productive, and there's lots of practical suggestions how to get there. >> tom: where do we start? >> first of all, focusing on your top priorities. and making sure that you get a focus on results, and not time. lots of people are into
logging time into the office, and say look how many hours i spent in the office. that's not the point. your clients and everybody you're trying to serve are more interested in the results the took professes three important strategies. first, get to the end as soon as possible. that moebs if you have a large project, don't spend days and weeks researching it. after a day or two come up with a conclusion that will guide the rest of your research and force you to to come to grips with the main issue. the second issue is ohio. only handle it once. this is a way to get through the small stuff quickly. so everybody gets a lot of e-mail. 80 to 90 percent of them discard, and the one that is are important, immediately go and get them done. >> don't put them aside to be done in a week or two from
now. you won't be able to find them. >> tom: one of the thing that is surprised me in the book is you said it's hube ris to think you could plan out your career in one time. but i often hear people say, you should know what you want to do, lay out your goals. like if you want to make it to the top, set out a goal and a plan to get there. are you cutting against that trend? >> l i am, in the sense that i don't think you can sit in your room and say when you're 25, this is where iment to be when i'm 50. i think it's kox*urnlt productive. i think what you need to do is be at your career as a series of steps >> that's a realistic goal. a step by step process increasing options. that's the third principle. >> tom: bob pozen, author of extreme productivity. thanks for your time. >> thanks for having me.
>> susie: the stock market isn't the only place where you'll find a lot of ups and downs, most of us know that life can throw you for a loop, too. this week lou's been thinking about worrying. here's author and educator lou heckler. >> do you sometimes feel that you worry too much? i do. i worry about making these essays relevant to you. i worry about my elderly mom's health, my granddaughter's safety. i even worry that i worry too much! george washington said, "worry is the interest paid by those who borrow trouble. " henry ford said, "a business absolutely devoted to service will have only one worry about profits. they will be embarrassingly large!" is it wanting to keep others from making the same miscues we did even our best lessons come from mistakes? is it the feeling as we get older that fewer people are listening to us, even though we might have a little wisdom to impart? i was reading a novel the other day by one of my favorite authors, james lee burke. in it, the main character makes this observation: worry robs us of our faith and our joy and gives us nothing in return. that's so true. i'll keep after it. don't worry!
i'm lou heckler. >> this is the weekend. susie. that's the program for friday september 21st, have a great weekend. >> andime not going to wor the weekend, tom. have a great weekend everyone. see you online at nbr monday night. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org >> join us anytime at nbr.com. there, you'll find full episodes of the program, complete show transcripts and all the market stats. also follows us on our facebook page at bizrpt. and on twitter @bizrpt.